08-18-08 AgendaCITY OF RICHFIELD, MINNESOTA
• MONDAY, AUGUST 18, 2008
REGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING
RICHFIELD CITY HALL COUNCIL CHAMBERS
6700 PORTLAND AVENUE
7:00 P.M.
AGENDA
Call to order
Roll call
1. Approval of minutes of Regular HRA Meeting of July 21, -2008
2. HRA approval of agenda
3. Presentation from Richfield resident Jack Swan regarding HUB shopping center
Staff Report No. 35
• Notes:
4. Consent Calendar contains several separate items which are acted upon by the HRA
in one motion. Once the Consent Calendar has been approved, the individual items
and recommended actions have also been approved. No further HRA action is
necessary. However, any HRA Commissioner may request that an item be removed
from the Consent Calendar and placed on the regular agenda for HRA discussion and
action. All items listed on the Consent Calendar are recommended for approval.
A. Consideration of approval of resolution accepting Urban Land Institute Housing
Initiative Grant, authorizing matching funds of $5,000 and executing contract
S. R: No. 36
Notes:
5. Consideration of denying rent-to-own management proposal by Third Way Network
for property at 7422 Fourth Avenue
• Staff Report No. 37
Notes:
•
6. Consideration of accepting Penn Corridor Master Revitalization Plan
Staff Report. No. 38
Notes:
7. Update regarding TOLD Cedar Corridor Redevelopment
Notes:
8. Update regarding Cedar Point II
• Notes:
9. Consideration of resolutions approving 2009 Proposed HRA budget and tax levy
and 2008 Revised HRA budget
Staff Report No. 39
Notes:
10. Executive Director report
11. Claims and payroll
Adjournment
Auxiliary aids for individuals with disabilities are available upon request. Requests must
• be made at least 96 hours in advance to the City Clerk at 612-861-9738.
•
J STAFF REPORT
35
AGENDA ITEM #
REPORT #
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
AUGUST 18, 2008
•
REPORT PREPARED BY:
REPORT PRESENTER:
INTERIM DEPARTMENT DIRECTOR
REVIEW:
REVIEWED BY EXECUTIVE DIRECTOR:
r
ITEM FOR HRA CONSIDERATION:
Consideration of a presentation from Richfield resident Jack Swan regarding the HUB
Sho in Center.
I. RECOMMENDED ACTION:
B Motion: No action necessa
II. BACKGROUND
Richfield resident Jack Swan had attended the June 16, 2008 Housing and
Redevelopment Authority (HRA) meeting with the intention of addressing the HRA
regarding his thoughts concerning the HUB Shopping Center (HUB). As this was
not an item on that meeting's agenda, Mr. Swan was not able to address the HRA.
Mr. Swan has since requested that he be placed on the HRA agenda in order to
make a brief presentation.
Currently, staff is not focusing on the HUB as a redevelopment area for a number of
reasons; chief among which is that neither the HRA nor City Council has provided
. direction to do so. Staff's assessment of the feasibility of redeveloping the HUB
were summarized in the attached City Council Memorandum dated December 20,
2007 (also provided to Mr. Swan).
JOHN STARK, INTERIM COMMUNITY
DEVELOPMENT DIRECTOR
NAME, TITLE
JOHN STARK, INTERIM COMMUNITY
DEVELOPMENT DIRECTOR
NAME, TITLE
3
081808 HUB
III. BASIS OF RECOMMENDATION
A. POLICY
• A resident has requested the opportunity to address the HRA
concerning an item not included on any previous -agenda.
B. CRITICAL IssuEs
• N/A
C. FINANCIAL
• N/A
D. LEGAL
• N/A
IV. ALTERNATIVE RECOMMENDATION(S~
• Provide staff with further direction regarding the HUB.
V. ATTACHMENTS
• December 20, City Council Memorandum with attachment.
VI. PRINCIPAL PARTIES EXPECTED AT MEETING
• Mr. Jack Swan
•
~~
• CITY OF RICHFIELD, MINNESOTA
Office of City. Manager
December 20, 2007
•
Council Memorandum No. 231
The Honorable. Mayor
and
Members of the City Council
Subject: Redevelopment Potential for the HUB Shopping Center
Council Members: ~ '
Recently, Sun Current reporter Steven. Pease contacted City staff to inquire about the
potential to redevelop the HUB shopping center. John Stark, Assistant Community
Development Director, responded to Mr. Pease via a-mail. 'The contents of that a-waif
are attached for your review.
The City Council may want to discuss the topic of redeveloping the HUB at the
upcoming goal setting meeting, as it has been mentioned at several .recent City Council
meetings.
~ ~
"~
Manager
SLD:cak
Attachment
E-mail: Department Directors.
Assistant to the City Manager
•
~-~
John Stark
From: John Stark
Sent: Friday, November 30, 2007 10:40 AM
To: 'spease@acnpapers.com'
Cc: Pam Dmytrenko; Steve Devich; Bruce Palmborg
Subjecf: FW: Hub redevelopment?
Steven,
Here are the best answers that I can provide to your questions:
I am assuming that the term "redevelopment" is being used in a way #o suggest that
the existing structures be demolished and replaced by new development (rather than
just a "renovation" of the center).
1. What would be the greatest obstacles one would face when it comes to Hub
redevelopment?
By far, the number one obstacle would be the high property value that cunrently
exists for the center.
There would be two possible scenarios.
The first scenario would have the existing property owners be a party #o the
redevelopment. For this scenario to make sense, the owners would .have to feel
confident that the cost of terminating {and likely buying out) leases, demolishing the
~_ structures;. forgoing rental income during a 12-24 month construction period- and
constructing new .buildings and site imp.royemen#s would be exceeded by the income
that the new development would generate.
In a second scenario, a new developer would be brough# in to do the
redevelopment. In this case, you would have to add their price to purchase the
shopping center to all the costs above.
!n either case, fhe value of the property and the strong income it generates would
lead most developers to question whether it was an economically rational decision to
make. 'fhe best way to offset these costs would be to replace the square footage
that exists with a great.deal more square footage. The "footprint" of the
development is constrained by the size of fhe property and the need for access and
parking, so the best wayto increase the size of the ieveloprrzent would be to adii
mul#iple stories to th:e development (judgin.g by past redevelopment projects -
anywhere from 4 to 20 levels). Retail will only work on a ground floor with surface
parking, so the add'r#ional levels would have to be office or residential. The housing
market is weak. right now, so. it would be difficult to ftnd someone willing to .commit to
the developmeht of 250 or more housing units (which would be the minimum number
of units I would expect to be needed to -make a residential deveiopmen# feasible). In
terms of the office marks#; I acn not aware of any developers who are currently
buiidin.g "speculative" office space (this is the model where they construct the
development first and look for office tenants second), so an office developer would
have to find one large user to take up around 300,000+ square feet of office space
(likely a corporete headquarters. site) or two or three users to split. this up. f am not
sure that the HUB site, however, would have the amenities (particularly the highway
visibility and access) #hat an office user would be looking for in its corporate or
regional headquarters. .
~-3
i would-never call any sits "impossible" to redevelop; but this site wauid defiantly be
very difficult.
2. Are there other "higher priorities" the city and council is currently addressing?
The City (and hiRA) are currently looking at a number of redevelopment sites:
• Cedar Point Phase 11 (77#h Avenue between 63rd and 65th);
• The Gedar Corridor south of 66th Street;
• The Lyridale Garden Center site;
• The former Bridgeman's restaurant site;
• .The current City Garage site (76th & Pleasant);
• The northeas# quadrant of 76th and Lyndale;
. A partian of the cemetery at ?2nd and Penn;
• Penn Avenue between the Crosstown and 68th Street;
. City/HRA awned properties on 77th Street (between Lyndaie and Nicollet}.
These sites haven't necessarily been "prioritized," but #hey have been identif ed by
either the City or HRA as sites that they want staff to direct their efforts towards. To
dete, neither the City Council nor the HRA have identified the HUB site as a
redevelopment priority.
3. Has Hub redevelopment been a broached topic before?
I son only speak for staff and not the decision-makers (City Council and HRA). As I
said, from an economic feasibility standpoint, staff has viewed this as a very difficult
site to redevelop, so we have spent our time exploring the possibility of ather.sites
that are suffering from snare blight {deterioration, vacancies; etc.), are vacant; are
city awned, or are impacted by negative features such as airport noise.
This is probably more information than you were looking for,. but I wanted to he as
thorough as possible.
Please let rae_know if you have any additional questions.
-John Stark, AICP
- Common. sty Qeveloprnent Department
- City of Fi'ich~eld
- j612) 861-9777
- jstarkQcityofrichtieid. org
AGENDA ITEM # ~F
REPORT # 36
STAFF REPORT
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
AUGUST 18, 2008
REPORT PREPARED BY:
KAREN BARYON, COMMUNITY
DEVELOPMENT MANAGER
NAME, TITLE
u
•
REPORT PRESENTER:
INTERIM DEPARTMENT DIRECTOR
REVIEW:
REVIEWED BY EXECUTIVE DIRECTOR:
ITEM FOR HRA CONSIDERATION:
Consideration to accept the Urban Land Institute Housing Initiative Grant, authorizing of
matchin funds in the amount of $5,000, and authorization to execute contract.
I. RECOMMENDED ACTION:
By Motion: Accept the Urban Land Institute Housing Initiative Grant,
a prove a $5,000 fundin match, and authorize execution of contract.
II. BACKGROUND
In May 2008 staff became aware of a grant opportunity through the Urban Land
Institute (ULI) to provide for an audit of the City's housing programs. Staff
submitted a letter of interest in June and was subsequently awarded the grant in
July.
The grant provides $5,000 towards the cost of contracting a housing specialist,
Cathy Bennett of Bennett Community Consulting, to conduct a comprehensive audit
of the City's housing programs and make recommendations on said programs. The
grant requires that the Housing and Redevelopment Authority (HRA) provide
matching funds in the amount of $5,000.
Staff had previously discussed contracting with a consultant to conduct a housing
program audit when they became aware of the grant.. Many of the HRA's housing
081808 ULI Housing Initiative Grant
JOHN STARK, INTERIM COMMUNITY
programs have been in place for a number of years and staff felt a comprehensive
audit and review was warranted to ensure that the HRA continues to make the best
use of its available funding to meet housing needs in the City.
Staff is recommending the HRA accept the ULI Housing Initiative Grant, approve
the matching funds in the amount of $5,000, and authorize execution of the
contract.
III. BASIS OF RECOMMENDATION
A. POLICY
• The HRA utilizes grants when available and appropriate to maximize
fiscal resources.
It is necessary to periodically review existing programs to ensure
effectiveness, appropriateness, and prudent use of its fiscal
resources.
B. CRITICAL ISSUES
• The cost to conduct a similar housing program audit independent of
ULI's Grant Program would be approximately $1.0,000.
C. FINANCIAL
• • Acceptance of this grant requires the HRA to match funds in the
amount of $5,000.
• The HRA has funds available in the 2008 budget.
D. LEGAL
• HRA's attorney has reviewed the contract.
IV. ALTERNATIVE RECOMMENDATION(S~
• Do not accept the grant, do not approve the matching funds, and do not
authorize execution of the contract.
V. ATTACHMENTS
• Resolution
• Award Letter
• Contract
VI. PRINCII'AL PARTIES EXPECTED AT MEETING
• HRA's Attorney
•
~J~
HRA RESOLUTION NO.
RESOLUTION ACCEPTING URBAN LAND INSTITUTE HOUSING INITIATIVE GRANT
AND AUTHORIZING MATCHING FUNDING
WHEREAS, the Urban Land Institute, in conjunction with the Regional Council of
Mayors have created a Housing Initiative Grant Program to identify and implement best
practices in housing programs throughout the region; and
WHEREAS, the Urban Land Institute has selected the City of Richfield to
participate in the Opportunity City Pilot Housing Initiative Grant Program to identify and
implement tools and strategies to support a full range of housing choices; and
WHEREAS, the HRA desires to participate in the Urban Land Institute's Housing
Initiative Grant Program; and,
WHEREAS, the Housing Initiative Grant Program requires matching funds in the
amount of $5,000 from the HRA.
NOW, THEREFORE BE IT RESOLVED that the HRA accepts the Urban Land
Institute Housing Initiative Grant, approves matching funds in the amount of $5,000, and
authorizes the HRA Chair and its Executive Director to execute such agreements as are
necessary to implement the project.
• Adopted by.the Housing and Redevelopment Authority of the City of Richfield,
Minnesota on this .18th day of August, 2008.
Suzanne M. Sandahl, Chair
ATTEST:
Joan Helmberger, Secretary
•
ULI Housing Initiative Grant
~l -z
• June 18, 2008
Mayor Debbie Goettel
City of Richfield
6700 Portland Ave S
Richfield, MN 55423
RE: ULI MN/Regional Council of Mayors Opportunity City Pilot Program
Dear Mayor Goettel:
Thank you for your strong interest in the ULI MN Regional Council of Mayors (RCM) Opportunity
City Pilot Program. We are pleased to inform you that Richfield has been selected, along with 3
other cities, to participate in this first pilot program effort. The Opportunity City Pilot Program
recipients will be announced at the RCM July meeting on July 14, 2008.
Your participation and commitment to the RCM Housing Initiative and the Opportunity City Pilot
Program will be a learning exercise that will benefit not only your city but many others throughout
the region. The program will help to identify and put into practice the key tools and strategies
needed in support of a full range of housing choices.
Project coordinator Cathy Bennett, Bennett Community Consulting, will be in contact with your key
staff members to review the process, prepare a work program and identify specific matching fund
needs.
• Thank you again for your interest and support. 1Ne look forward to working with you on the
Opportunity City Pilot program. If you have further questions contact Caren Dewar at 612-759-
- 1016 or Cathy at 651-257-4613.
Sincerely,
John Shardlow, Chair
ULI Minnesota
Cc: Steve Devich, City Manager
•
~-3
•
~nneso a
HOUSING INITIATIVE -OPPORTUNITY CITY PILOT RegioaalCo~ncRofMayors
PROGRAM AGREEMENT
. THIS AGREEMENT is made and entered. into this day of , 2008,
by and between THE URBAN LAND INSTITUTE OF MINNESOTA ("ULI MN") and THE
RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY (the "HRA").
RECITALS
A. The Urban Land Institute's mission is to provide leadership in the responsible
use of land and in creating and sustaining thriving communities worldwide.
B. The Regional Council of Mayors (RCM), supported by ULI Minnesota,
provides anon-partisan platform that strategically engages mayors and land use
professionals to support a more connected, more sustainable and more prosperous region.
C. The RCM Housing Initiative Opportunity City Pilot Program builds on the
collaborative relationships among RCM and ULI professionals to identify and implement
• best practices that support a full range of housing choices for economic stability and
regional prosperity with funding support provided by the Family Housing Fund.
D. A team of ULI MN professionals, with a representative from the Family
Housing Fund, selected THE CITY OF RICHFIELD to participate in the Opportunity City
Pilot Program and in working together will identify and implement tools and strategies to
support a full range of housing choices. The approach will serve as a model for other
cities and be brought to scale at the regional level.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual terms hereof, the ULI MN and
the HRA agree that the Opportunity City Pilot Program Agreement shall be as follows:
ULI MN will provide the following to the HRA based upon the attached letter of need for
assistance, work plan and timeline.
• Bennett Community Consulting will complete housing audits that evaluate current
housing goals, strategies and demographic trends, identify gaps, review sites for
future housing growth and redevelopment activities, and recommend modifications,
additions and strategies for creating housing choices.
The HRA will rovide the followin to ULI MN in su ort of the O ortunit Cit Pilot
p g pp pp Y Y
Program and in exchange for the services provided above.
4-'f
• Funding match in the amount of $5,000 provided to ULI MN with the signature of the
agreement.
• HRA staff support to .assist the ULI MN staff and contractors in collecting
information available to the HRA and City, coordinating HRA/City meetings and
providing guidance for the completion of services outlined above.
• Consideration by policy leaders to work towards establishing the recommended
tools and strategies. (ie: changes and modifications to official controls) in support a
full range of housing choices provided to the HRA as a result of the Opportunity City
Pilot Program.
Except as amended, the Agreement is and shall remain in full .force and effect in
accordance with its terms.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
The Urban Land Institute Minnesota
By:
Its: Chair
The Richfield Housing and
Redevelopment Authority
By:
Its: Chair
•
•
AGENDA ITEM # rj
REPORT # 37
STAFF REPORT
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
AUGUST 18, 2008
•
•
REPORT PREPARED BY:
REPORT PRESENTER:
ACTING DEPARTMENT DIRECTOR
REVIEW:
REVIEWED BY EXECUTIVE DIRECTOR:
KIRSTEN PARTENHEIMER, HOUSING
SPECIALIST
NAME, TITLE
JOHN STARK, COMMUNITY DEVELOPMENT
DIRECTOR
ITEM FOR HRA CONSIDERATION:
Consideration of a denial of a rent-to-own management proposal by Third Way Network for the
ro ert at 7422 4th Avenue.
I. RECOMMENDED ACTION:
By Motion: Deny the rent-to-own management proposal by Third Way
Network for the pro ert at 7422 4th Avenue.
II. BACKGROUND
In early 2007 the Housing and Redevelopment Authority (HRA) redeemed its lien on 7422
4th Avenue and acquired the property through the foreclosure process. Since the HRA
took ownership, there has been approximately $25,000 in improvements completed to
make the house marketable. A legal challenge by the former owner has delayed the
process of marketing the home for sale, but a recent court decision will now allow staff to
market the home and subsequently close on any sale upon the conclusion of the appeal
date on the court action (October 22, 2008). A listing price has not yet been determined.
In order to recoup all of its costs incurred in the acquisition and rehabilitation of the home,
a sales price of at least $155,000 must be achieved.
Recently, Third Way Network approached HRA staff with a proposal to purchase the
property through arent-to-own process.
081808 Third Way Network 7422 4th Ave proposal
Third Way Network places low-income individuals and families into stable, affordable
• housing by providing long-term family self-sufficiency through training and mentoring.
Beginning in September of this year, Third Way Network proposes to provide property
management services and rent the house to a qualified working family who would
eventually purchase the home for $155,000 on or before June 1, 2009. During the interim,
the HRA would not incur any holding, management or realtor costs to manage or sell the
property. Third Way Network is proposing to make a number of improvements to the
house and property and is requesting the HRA match 50% of the estimated $10,000
improvement budget.
Third Way Network is not proposing to buy the house from the HRA. They are proposing
to act as property manager and intermediary between the HRA and a family in one of the
organization's homeownership programs.
Third Way Network would like to make improvements to the property, including creating
third and fourth bedrooms in the basement, addressing the mold and moisture issues in
the basement, installing appliances, and performing exterior cleanup, to accommodate the
family interested in renting the property.
Like all property managers operating in the City of Richfield, Third Way Network will be
required to obtain a rental license for the property and make any required repairs.
Staff has a number of concerns regarding the Third Way Network proposal:
• • With only 868 square feet on the first level (not including finished space in the
basement) and one legal bedroom, staff believes that the home is insufficient in
size to accommodate the space needs of a family of four. Additionally the make-up
of the household dictates that they occupy a unit with a minimum of four bedrooms.
• The source of subsidy Third Way Network proposes to pay the tenant's rent is
speculative and tenuous.
o In Attachment B, the "Analysis of 7422 4th Avenue" Third Way Network lists
that of the $1,400 monthly rent, the family will pay $700 and Third Way
Network will pay the remaining $700 for the first two months.
o In the following seven months, the analysis indicates the family would be
receiving a "Kids @ Home" rent subsidy payment to provide $700 per month
towards the total rent. However,-the family cannot make application to the
program until September and there is no guarantee the family would be
admitted into the program.
o Additionally, based on the household's income, the maximum subsidy
available through the Kids @ Home program would be approximately $256-
$406 per month, provided the home is converted into a three or four-
. bedroom house.
• Furthermore, there appears to be a number of issues associated with the proposed
• improvements to the house including locating the proposed deck directly over two
egress windows for the basement bedrooms.
Based on the concerns stated above, staff recommends that the HRA deny the proposal
by Third Way Network for the property at 7422 4th Avenue.
w III. BASIS OF RECOMMENDATION
A. POLICY
• The HRA supports housing for families in a wide range of incomes.
• The HRA recognizes the importance of providing housing that is
appropriate to the size of the household as well as to the household
income.
B. CRITICAL ISSUES
• The HRA spent a total of $155,000 to acquire and renovate the house.
• The HRA would like to market the property for at least nine months to
attempt to sell it at market value.
• The house is currently vacant.
• The house is small and has only one legal bedroom. A second room
could be marketed as ~ bedroom if a closet were added.
• Given the overall square ,footage of the house, staff believes it is
insufficient in size to accommodate the proposed household..
• A $700 Kids @ Home subsidy has been included in the rent proforma
that is not realistic.
C. FINANCIAL
• The HRA bought the house for $130,000 and spent $25,000 for
improvements to make it marketable.
• • The funds to purchase and renovate the home came from the Capital
Improvement Fund. Normally, a $1 million balance is always
maintained in this fund with any additional funds (garnered from
interest, etc.) being transferred to other projects. In the case of the
purchase of 7422 4th Avenue, the HRA authorized depletion of the
fund below $1 million with the understanding that the fund would be
replenished upon the sale of the home.
• A~reasonable market value for the home has not yet been determined.
D. LEGAL
• If the proposal were to be accepted, staff would involve legal counsel
in drafting the appropriate documents.
IV. ALTERNATIVE RECOMMENDATION(S)
• Accept the proposal and direct staff to work with Third Way Network on
drafting the appropriate documents for proceeding.
V. ATTACHMENTS
• Third Way Network proposal
• Analysis of 7422 4th Avenue
VI. PRINCII'AL PARTIES EXPECTED AT MEETING
• Paul Halvorson, Executive Director, Third Way Network
Third WayTM 5-I
~ ~ Network
2912 Fremont Ave. N., Suite 200 • Minneapolis, MN • 55411
To: Richfield HRA
From: Paul P. Halvorson, Executive Director,
Date: August 7, 2008
Re: Rent-to-own management proposal for 7244 4th Street North
Summary: Effective Septemberl, 2008, Third Way Network proposes to manage the property at
7244 4th. Street S. and rent it to a qualified working family who would eventually purchase the home
for $155,000 on or before June 1, 2009. During the interim, the HRA would not incur any holding,
management or realtor costs to manage or sell the property. Third Way Network would make the
necessary improvements and ask the HRA to match $5;000 of an estimated $10,000 improvement
budget. This project is designed to place a workingfamily into housing and to send their children to
the Richfield Public Schools.
Objectives:
1. Manage and sell the property on behalf of the RHRA. The HRA would save an estimated
$12,000 in additional expense based on not incurring property management fees, holding
costs or realtor costs to sell the property. In addition, an occupied property is less likely to be
subject to vandalism and theft.
2. Provide housing for a working family who desires to live in Richfield. A single mother
with two children and one grandchild would live in the property. Two of the children would
attend the Richfield Public Schools starting in September. This family will graduate on
August 19th from Third Way Network's Circle to Success Training Program. The family has
no criminal background and the mom has a credit score in the low 700s. This family
currently lives in St. Paul and greatly desires to live in Richfield.
3. Prepare the house for occupancy/sale. Third Way Network would complete needed
renovations to the property to convert it into a four bedroom at an estimated cost of $10,000.
a. Install used appliances (all missing): Refrigerator, Stove, Dishwasher, Microwave,
Washer, Dryer and Dehumidifier in basement. ($2,000)
b. Install window coverings. ($400)
c. Trim brush, clean yard, repair fence, remove former wheel chair ramp from front
stoop, and stain deck. ($300)
d. Install two egress windows in basement. ($3,500)
e. Build two bedrooms in basement walls, floors, electric, heating. ($2,400)
f. Building Permit, trash removal and Misc ($400) All work code.compliant
g. 10% Contingency~($1,000)
continued
Background: Third Way Network is anon-profit housing developer, family mentoring and ,~u~~.
"Creating safe, decent housing people can afford and call home"
Phone: 612-332-1311 • Fax: 612-332-1317 • Toli Free: T-866 Third-Way (866-844-7392)
www.ThirdWayNetwork.org Email: info@ThirdWayNetwork.org
~~
community engagement organization provides housing for low-income working families earning
between $20,000 and $40,000 a year. Families must complete an 8 week training program in
independent living skills before they qualify for rental housing. As renters, families must continue
their training to demonstrate housing stability. Over time families earn incentives to assist them in
purchasing a home. Families are required to maintain their homes and pay rent and utilities on time.
If they do not, they lose their housing. Families sign month-to-month leases. If one family does not
work out, another trained family is ready to move in. About 80% of the 52 families trained in the
last three years are successful and stable in housing with several achieving homeownership. Once
stable, families complete a Homestretch Program and prepare to qualify for a home mortgage and
home ownership. Third Way Network will continue to work with families for two years after they
become homeowners to ensure their long term success. During this time, families must provide 8
hours a month in community service in Richfield.
Third Way Network has been an active member of the Richfield Attainable Housing Committee and
currently uses Oak Grove Lutheran Church as a training site where families, volunteer mentors and
staff meet for regular training. Eight families have been in Richfield.
Revenue & Risk: Third Way Network will set rent at a level appropriate for the family and to cover
costs. Third Way Network will manage the risks associated with the property (replacing tenants,
maintenance, neighbor issues, etc). The rent proceeds .will first be used to pay property taxes,
insurance, maintenance and a property management fee. Any additional funds collected will then be
used to cover the initial capital expense of preparing the property for occupancy. Third Way
Network maintains a revolving loan fund with the Greater Metropolitan Housing Corporation
(GMHC) which is a source of funds for Third Way Network housing projects. These funds can be
accessed on a matching basis. We are asking RHRA fora $5,000 match. If there is an unpaid
balance on the GMHC loan at the time the property sells, thi s would be added to the sale price of the
property and repaid to GMHC at closing. Third Way Network would work with a designated staff
person of the HRA to address any issues or make adjustments.-along the way.
Request:
1. Authorize Third Way Network to enter into a management agreement with the HRA to
manage the property at 7422 4th Street N including covering all holding costs and preparing
to sell the property by June 1, 2009 (within 10 months) for $155,000 to a qualified family.
2. Authorize spending $5,000 on a matching basis to prepare the house for occupancy. (Third
Way Network would cover the additional expense by using its GMHC loan funds.)
3. Explore a partnership with Third Way Network to acquire, rehab and manage other
properties (i.e., distressed, foreclosed, tax-forfeiture, or problem properties) to be rented and
sold to qualified families participating in Third Way Network family stability programs..
Thank you for the opportunity to present this proposal. I look forward to identifying other ways to
work together to use housing to support family stability and maintain a vital Richfield community.
I also look forward to the possibility of bringing this family to a RHRA meeting next summer as
a homeowner to tell her story.
Sincerely,
Paul P Halvorson
Paul P. Halvorson, PhD
Executive Director and Founder
~!~
Analysis of 7422 4th Av S, Richfield. updated: 8/7/2008
Prepared by Paul Halvorson, .Executive Director, Third Way Network Phone: 612-332-1311
1 House built in 1939 Owner: Richfield Housing Redevelopment Authority
2 Market Value:$190,000
3 Lot Size: 59 x 134
4 Description: 2 bedroom, two bath home, with new living room carpet, eat in kitchen, finished room in basement
large deck outside in back, single car attached garage. Basement can be made into two more bedrooms with
second bath room already in basement
5 Estimated Sale price of Home $155,000 (What the HRA needs to recoup its investment
Note this is in line with a recent market analysis of sales within the last 800 days (Refer to Analysis)
6 Estimated Cost of Buying a Home (purchase price plus closing costs)
$ 3,875 Estimated Closing Costs (2.5%)
$ 155,000 Estimated Purchase Price
$ 158,875 Total Estimated Funds needed at time of Home Purchase
7 Source of Funds to buy home (Other options include working with the land trust).
$ 5,000 Contribution by Family
$ 5,000 Contribution by Third Way Network
• $ 148,875 Mortgage
$ 158,875 Total Source of Funds
8 Estimated Cost of Owning Home
$ 835
$ 65
$ 175
$ 225
$ 1,300
9 Affordable Annual Income:
Mortgage (Principle and Interest Payments)
Insurance
Taxes
Utilities (Gas, Electric, Water/Sewer and Trash)
Estimated Total Monthly Cost of Ownership
$ 38,999 (based on one third for cost of housing -rent and utilities)
10 Estimated Cost to Rent House Market Rent would be $1,400/month for a four bedroom
Month Family Pavs Subsidy Source of Subsidy
September Rent $ 700 $ 700 TWNetwork covers first month
October Rent $ 700 $ 700 TWNetwork covers Second Month
November Rent $ 700 $ 700 Kids at Home covers pending (application date is 9/2/08)
December Rent $ 700 $ 700 Kids at Home covers
January Rent $ 700 $ 700 Kids at Home covers
February Rent $ 700 $ 700 Kids at Home covers
March Rent $ 700 $ 700 Kids at Home covers
April Rent $ 700 $ 700 Kids at Home covers
Ma Rent $ 700 $ 700 Kids at Home covers
June -Ownership $ 1,075 $ - no subsid aid
Family covers cost of all utilities (estimated at $225/month), not included in above analysis
11 Total Cost of Renting for Family (est.): $ 925
Page 1 of 3 (Printed on 8/11/2008 File: 081808 TWN proposal_Attach B.xls
5-~
• Affordable Income $ 33,300
If the family can save $600/month during this time, they will have saved $5,400.
Of this, $5,000 would be matched by Third Way Network and used to buy a home.
12 Objective: Prepare to rent out a four bedroom house to a family for 9 months after which they would be ready
to purchase the property for $155,000 or the current appraised value (whichever is less)
13 Strategy: The City of Richfield (Owner) wants to sell the House by June 1, 2009..
This gives 9 months to purchase, 6 months (Sept 1 -Feb 28) to demonstrate rental stability
and up to 3 months (March, April, May) to qualify for a mortgage, sign purchase agreement and purchase home
by the end of May 2009
14 Savings to the RHRA (over 9 months)
a Holding Costs (This is in lieu of.
$ 1, 575
$ 585
$ 2,025
$ 450
$ 4,635
b .Cost of Selling $ 7,750
$ 12,385
putting an empty building on the market)
Taxes
Insurance
Utilities
Maintenance
Holding Costs (9 months)
Realtor Fee (5% of $155,000)
Total Savings to City over 9 months
c No HRA staff needed to manage property or collect rent. (Some time needed to manage relationship with Third Way Network.)
• d House is prepared for family occupancy by Third Way Network
a kitchen appliances installed (working used appliances)
b washer and dryer installed
c dehumidifier in basement installed
d two egress windows installed in basement
e two bedrooms built in basement
f yard work and repairs down outside
Note: The $5,000 improvement grant is less money than would be spent if RHRA put the house on the market as it and worked with a realtor
15 Third Way Network Project Finances
Revenue (Projected)
$700 Rent from family (9 months)
$700 Rent paid by Kids@Home (7 months -pending)
$1,400 Total Rent Revenue (monthly)
Expenses (Projected
$ 175 Taxes
$ 65 Insurance
$ 100 Property Management Fee
$ 100 Maintenance Fund Total loan
$ 960 Loan Payment (cover Fix up Costs)
$ 1,400 Total Rent Expense (Monthly)
Note: Kids at home payment starts in November
~16 Capital Improvement Budget
Source of Funds
Page 2 of 3 (Printed on 8/11/2008 File: 081808 TWN proposal_Attach B.xls
~'~
$ 5,000 RHRA -Grant
$ 5,000 Third Way Network (GMHC Loan Funds - 5% fixed)
$ 10,000 Total Funds Available
Cost of Third Way Network Funds
$ 5,000 Principle
$ 188 Interest (5%)
$ 5,000 Matching Funds for Family Downpayment
$ 10,188 Total Use of Third Way Network funds
$ 7,240 Funds applied from estimated net rent collected (over 9 months)
$ 2,948 Funds covered by Third Way Network Fundraising
17 Backup Plan
If first family is not working out, would find other families who would
sign purchase agreement and move in as new homeowners.
Many Third Way Network families see living in Richfield as a real asset.
18 Questions, changes or comments, please call Paul Halvorson at 612-332-1311
•
•
Page 3 of 3 (Printed on 8/11/2008 File: 081808 TWN proposal_Attach B.xls
AGENDA ITEM # 6
REPORT # $$
•
J STAFF REPORT
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
AUGUST 18, 2008
REPORT PREPARED BY:
REPORT PRESENTER:
KAREN BARYON, COMMUNITY
DEVELOPMENT MANAGER
NAME, TITLE
KAREN BARYON, COMMUNITY
DEVELOPMENT MANAGER
NAME, TITLE
•
DEPARTMENT DIRECTOR REVIEW:
REVIEWED BY EXECUTIVE DIRECTOR:
ITEM FOR HRA CONSIDERATION:
Consideration of the final draft of the Penn Corridor Master Revitalization Plan
I. RECOMMENDED ACTION:
B Motion: Accept the Penn Corridor Master Revitalization Plan.
II. BACKGROUND
The City of Richfield and the Richfield Housing and Redevelopment Authority (HRA)
have long recognized the need to ensure the future vitality of Penn Avenue between
the Crosstown Highway and 68th Street. This area was established in the 1950's
and 1960's and is characterized by traffic congestion, a lack of parking, an
unfriendly pedestrian environment, and aging buildings. It is also home to a number
of iconic businesses frequented by residents of Richfield and the surrounding
communities.
In the late 1980's, the City formed an advisory committee, Penn Avenue and Sixty-
Sixth Street. (PASSS), to create a vision for the future of the area to ensure its
continued vitality. And in 1989, based on recommendations from the PASSS
committee, the City adopted a set of design guidelines for the area.
In 1999, PASSS reconvened to evaluate the feasibility of a wholesale
redevelopment of the area. City staff, PASSS members, and Ryan Companies
081808 Penn Corridor Master Plan
worked together on the project and subsequently determined it was financially
infeasible at the time to assemble properties and redevelop the area.
• In earl 2006 the Cit initiated a ro'ect with the Universit of Minnesota's U of M
Y ~ Y P J Y ( )
Humphrey .Institute to create along-term land use vision for the Penn Avenue
Corridor. The students met with City leaders, local residents, and business owners
to create three initial visions for Penn Avenue, along with a proposed list of
improvements for the Corridor. A final vision was also outlined in the report.
Later in 2006, the City contracted with the planning firm Hoisington Koegler Group
Inc. (HKGi), and formed a new task force, the Penn Crossings Advisory Group, to
build upon the information collected and strategies emerging from the U of M
visioning study, to ultimately create a master plan for the area to ensure a cohesive
development of the Corridor as reinvestment, revitalization, and redevelopment
occur.
The Penn Crossings group has been meeting actively since January of this year to
review existing plans, studies, and reports relevant to the,project area and to
formulate criteria for the development of a master plan.
Three public meetings were held in March, May, and August of this year to gather
feedback and input from residents and stakeholders to assist in formulating a
concept plan for the area.
• Staff and HKGi have also held numerous meetings with the City Council, Planning
Commission, HRA, City Department Directors, Hennepin County, City of
Minneapolis planning staff, and Metro Transit in an effort to incorporate ideas,
comments, and concerns from all potentially impacted parties.
Based upon all of the information, input, and feedback gathered, HKGi has created
a final draft Master Revitalization Plan ("Plan") for the Penn Avenue Corridor. The
purpose of the Plan is to guide the revitalization and redevelopment of the Penn
Corridor as it occurs to create a cohesive, inviting, and pedestrian-friendly
environment.
City staff, HKGi, and the Penn Crossings Advisory Group are currently developing
design guidelines to be used in conjunction with the Master Plan to ensure the goals
for the revitalization of the area are met.
Staff is recommending the HRA accept the Penn Corridor Master Revitalization
Plan.
III. BASIS OF RECOMMENDATION
A. POLICY
• N/A
B. CRITICAL ISSUES
• Without a Master Plan to guide the revitalization and redevelopment of
the Penn Avenue Corridor, the. area is1ikely to remain a disjointed and
disconnected commercial area that will continue to decline. '
• The Planning Commission will be considering the Penn Corridor
Master Revitalization Plan at their meeting on August 25, 2008.
• The City Council will be considering the Penn Corridor Master
Revitalization Plan at their meeting on September 11, 2008.
C. FINANCIAL
• As the area declines, property tax revenue will also decline.
D. LEGAL
• N/A
IV. ALTERNATIVE RECOMMENDATION~S~
• N/A
V. ATTACHMENTS
• Final Draft Penn Corridor Master Revitalization Plan
VI. PRINCIPAL PARTIES EXPECTED AT MEETING
• Hoisington Koegler Group inc.
C7
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Parking Stalls- "`?
20,000 5 F Corrtmercia
23~ Parking Stalls ~"
154 Residential Units'~•
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~°s".~~8,000SFCommera
310 Parking Stalls ~ '
'~S, Residential U,r~its
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Parking Stalls
Residential Units
rx-~~ '.
00"SFCommercia I
Parking Stalls
Residential Units :~;
.~:.~~r ~
00~5FC menial
Parking Stalls
Residential Uniu ;
Parking Stalls Y '
Approximate Proposed Conditions by Block
SF Commercial Parkin Stalls ResidenBal Unds
62nd w 42 000 220
82nd E 35 500 525
89rd W 82 500 285
63rd E 125 14
64th W 20 000 232 154
64th E 9 000 70 52
66th W 40 000 220
65th E 18 000 237 120
BYrw 78 000 310 68
66th 28000 80
•
STAFF REPORT
9
39
AGENDA ITEM #
REPORT #
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
AUGUST 18, 2008
n
u
REPORT PREPARED BY:
REPORT PRESENTER:
DEPARTMENT DIRECTOR REVIEW:
REVIEWED BY EXECUTIVE DIRECTOR:
CHRIS REGIS, FINANCE MANAGER
NAME, TITLE
ITEM FOR HRA CONSIDERATION:
Consideration of resolutions approving proposed property tax levy for payable 2009 for
certification to Henne in Count .
L RECOMMENDED ACTION:
By Motion: Adopt the attached resolutions approving the 2009
Proposed Housing and Redevelopment Authority Budget and Tax
Levy and 2008 Revised Housing and Redevelopment Authority
Budget.
II. BACKGROUND
N/A
III. BASIS OF RECOMMENDATION
A. POLICY
• Minnesota Statutes require adoption of a preliminary levy from each
taxing authority.
• The budget and accompanying proposed levy for 2009 are ready for
consideration.
0818budget
CHRIS REGIS, FINANCE MANAGER
• Even though a pubic hearing for the HRA tax levy is not required by
State Statute, this does not preclude the HRA from opening this item
up for public discussion if the HRA desires to do so.
B. CRITICAL ISSUES
• As required by State Statutes, each taxing authority must certify its
proposed tax. levy for the payable year 2009 to the County Auditor on
or before September 15, 2008.
C. Fn_vANCIAL
• The Proposed-2009 HRA levy represents a 3.00% increase from the
previous year's levy.
• The levy as proposed is approximately $107,000 less than the
maximum HRA levy established by law of the .0185% of the City's
total taxable market value.
D. LEGAL
• N/A
IV. ALTERNATIVE RECOMMENDATION~S~
• The HRA could adopt a preliminary levy less than the one proposed herein.
However, that would not provide for programs that are recommended in the
2008 Revised/2009 Proposed budget.
V. ATTACHMENTS
• Resolution Approving Proposed 2009.Housing and Redevelopment Authority
. Budget and Certifying the 2009 Tax Levy
• Resolution Authorizing Revision of the 2008 Budget of the Housing and
Redevelopment Authority of Richfield
VI. PRINCIPAL PARTIES EXPECTED AT MEETING
• N/A
HRA RESOLUTION NO.
S RESOLUTION APPROVING PROPOSED 2009 HOUSING AND REDEVELOPMENT
AUTHORITY BUDGET AND CERTIFYING THE 2009 TAX LEVY
BE IT RESOLVED by the Housing and Redevelopment Authority of the City of
Richfield, Minnesota as follows:
Section 1. The budget for the Housing and Redevelopment Authority
General Fund of Richfield for the year 2009 in the amount of
$488,400 is hereby ratified.
Section 2. The estimated gross revenue of the Housing and Redevelopment
Authority General Fund of Richfield from all sources, including
general ad valorem tax levies as hereinafter set forth for the year
2009, and as the same are more fully detailed in the Executive.
Director's official copy of the budget for the year 2009, in the
amount of $501,530 is hereby approved.
Section 3. There is hereby levied upon all taxable property in the City of
Richfield an ad valorem tax in 2008, payable in 2009 for the
following purposes:
• Housing and Redevelopment Authority $488,925
Section 4. A certified copy of this resolution shall be transmitted to the County
Auditor.
Adopted, by the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota this 18th day of August, 2008.
Suzanne M. Sandahl, Chair
ATTEST:
Joan Helmberger, Secretary
•
HRA RESOLUTION NO.
RESOLUTION AUTHORIZING REVISION OF THE 2008 BUDGET OF THE
HOUSING AND REDEVELOPMENT AUTHORITY OF RICHFIELD
WHEREAS, Resolution No. 1017 appropriated funds for personal services and
other expenses and capital outlay for the Housing and Redevelopment Authority for the.
year 2008, and
WHEREAS, The Executive Director has requested a revision of the 2008 budget as
detailed in the 2009 budget document.
NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment
Authority of Richfield, Minnesota as follows:
Section 1. That the 2008 appropriation for the Housing and Redevelopment
Authority General Fund be revised as follows:
$48,980 decrease
Section 2. Estimated 2008 gross revenue of the Housing and Redevelopment
Authority General Fund from all sources, as the same are more fully
detailed in the Executive Director's official copy of the 2008 budget
document, are hereby revised as follows:
•
$31,240 decrease
Section 3. That the Executive Director bring into effect the provisions of this
resolution.
Adopted by the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota this 18th day of August, 2008.
Suzanne M. Sandahl, Chair
ATTEST:
Joan Helmberger, Secretary
•